CertusBank in Greenville, S.C., is setting the stage to liquidate itself after agreeing to sell or close all of its remaining branches.
The $1.4 billion-asset bank said in a press release Monday that it will sell most of its Georgia and Florida branches to Community & Southern Bank in Atlanta. Community & Southern said in a separate release that it will gain $764 million in deposits and $230 million in loans, along with entry into Jacksonville, Fla., and the Georgia cities of Columbus and Macon.
Certus will also sell branches, deposits and loans in the Georgia cities of Savannah and Rincon to Queensborough National Bank and Trust in Louisville, Ga. A branch in Warner Robins, Ga., along with $62 million in deposits and $3 million in loans, will be sold to Morris Bank in Dublin, Ga.
BNC Bancorp in High Point, N.C., agreed to buy seven branches, along with $284 million in deposits and $210 million in loans, in South Carolina. The $4.2 billion-asset BNC said in a separate release and investor presentation that it will pay a premium of $7.8 million, or 2.75%, for the deposits.
Certus said it will close its branches in Ponte Vedra, Fla., and the South Carolina cities of Columbia and Charleston. The company will also shutter its branch in downtown Greenville, where the bank also had a nearly $1 million art collection, an office suite with 300,000 pennies affixed to the ceiling, and a 13-foot touch-screen "media wall."
The branch sales are expected to close in the third and fourth quarters.
"I'd like to thank our customers who have entrusted us with their relationship," Len Davenport, who recently became Certus' president and chief executive after John Poelker resigned due to medical issues, said in BNC's release. "Our teammates have provided the highest levels of service to our customers each and every day."
Certus said in its release that it maintains strong liquidity, adding that its bank operations will continue normally as it works to dispose of the branches.
The bank has been aggressively paring back its operations, announcing plans to exit North Carolina earlier this year by selling all of its branches in the state. The company also orchestrated separate deals to sell its small-business finance unit to BankUnited, its home loan business to AmeriSave Mortgage and its brokerage and investment-advisory businesses to Eximius Holdings.
Poelker was hired after Certus fired its founders last April. The company was founded in 2011 to buy failed banks, but disappointed its backers after recording pretax losses of more than $100 million in 2012 and 2013. The company also lost nearly $70 million last year.
In addition to its losses, Certus faces uncertainty due to last year's firing of its three founders, Milton Jones, Walter Davis and Angela Webb, who were terminated weeks after an American Banker article focusing on the bank's poor financial performance and conflicts with investors. A fourth founder, Charles Williams, also stepped down.
Shortly after being terminated, Jones, Davis and Webb filed a lawsuit against Certus and Benjamin Weinger, a hedge fund investor, for libel and conspiracy, alleging that the plaintiffs were defamed and then fired as part of a racist scheme to seize control of the company. The case was dismissed in the U.S. District Court for South Carolina, though the plaintiffs have filed an appeal.
Troutman Sanders and Banks Street Partners advised BNC. Nelson Mullins Riley & Scarborough and Sandler O'Neill advised Certus for the sale of the South Carolina branches. Bryan Cave and Banks Street represented Morris Bank in its negotiations. Barclays and Alston & Bird represented Community & Southern.
Paul Davis is an editor with American Banker.
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